DOD mandates RFID tags for products sent to distribution depots

By Jason Miller

Sep 13, 2005

The Defense Department finalized the requirement that all products shipped to the Defense Distribution Depot in Susquehanna, Pa., or San Joaquin, Calif., must have passive radio frequency identification tags.

In a final rule published today in the Federal Register, DOD officials said contractors must affix the devices on tags or pallets to improve 'visibility of DOD assets in the supply chain, increase accuracy of shipments and receipts and reduce the number of logistic 'touch points' in order to decrease the amount of time it takes to deliver material to the warfighter.'

DOD issued a policy in July 2004 requiring that all products going to both depots use RFID tags by Jan. 1, 2005. The two Defense Logistics Agency depots met the deadline to use the tracking technology, but the Federal Register notice amends the DOD Federal Acquisition Regulations Supplement codifying the requirement.

The department published a proposed rule in April and received comments from 33 persons and organizations, totaling 93 comments. In the new rule, DOD helped clarify the definitions of an exterior container and products on a pallet, and the requirement to ensure the data encoded on each RFID tag is unique.

DOD issued this rule on the heels of a critical Government Accountability Office report on the department's implementation of passive RFID.

GAO found DOD has not incorporated sound management principles into the strategic approach to using RFID tags, and is therefore putting its program at risk.

'Existing passive RFID implementation policy and operational guidance for both DOD and its military components lack or only partially incorporate several key management principles, such as those used by leading organizations and embodied in the Government Performance and Results Act of 1993, that are needed to effectively guide, monitor and assess implementation,' auditors said.

DOD is using RFID to improve it inventory management, which has been on GAO's high-risk list since at least 1990 because of poor visibility of product shipments. Auditors said DOD has been using active RFID since the 1990s, but only started using passive RFID in the last few years. But the implementation of passive RFID is problematic, the audit agency found.

GAO said DOD's plan to use RFID is missing or only partially includes several key components, including:

General and longer-term goals

A description of specific actions to support those goals

Performance measures

Schedules and milestones

Identification of total resources needed and annual cost estimates

Evaluation of the overall program with specific processes to allow for adjustments and changes.

GAO recommended that DOD develop a departmentwide management approach to ensure 'RFID technology is efficiently and effectively implemented throughout the supply chain processes',' and a plan for each military service.

Auditors also suggested DOD identify challenges impeding passive RFID use and the actions the agency must take to mitigate them.

In a letter to GAO, DOD officials said they did not agree that there is a need for a defensewide plan because their approach is to roll out passive RFID 'from the bottom up,' and the department already set out program goals and performance measures. Officials also said they did not agree with the need to identify the challenges to implementing RFID.

'The challenges outlined in the audit have either already been mitigated or represent a misunderstanding of the technology and its implementation in the department,' said Bradley Berkson, principal assistant deputy undersecretary of Defense for logistics and materiel readiness, in a letter to GAO.